4 ms·

The textbook example of zero-sum thinking is how most people (specially those involved in politics) talk about imports and exports.

BurningFrog 7y ago
All trade is a victim of this. In reality, trade always creates value, and you can argue that all wealth in the world is created from trade, most of it interpersonal. But people still feel instinctually that each transaction has a winner and a loser.
- luckylion 7y ago
  That'll likely depend on the definitions of trade and winning/losing. If you're starving and I'm the only one around and I sell you a loaf of bread for a million dollars, did we both win? Sure, you'll live another week, but I sold you a bread that you'd usually pay a few bucks for and got a million in return. If I'm paying the mafia for protection, do we both win? Sure, my restaurant doesn't burn down, but if the mafia didn't exist, it wouldn't burn down either. What about forced trades without perceived value, like a mandatory membership in organizations whose services you don't care for? What do you gain, besides not being thrown into jail?
  - BurningFrog 7y ago
    It certainly does depend on the definitions. The unstated assumption is voluntary trades in a system of private property rights. Under those conditions, neither side will agree to the trade unless they benefit from it, so value is created for both sides. So the mafia protection fee is a robbery, not a trade. The mandatory membership probably too. The bread loaf is a trade, and both people undeniably profit. Emotionally, it feels "exploitative", but if you think about it, things are less clear. In reality, people stock up food to be prepared to sell it during famines in order to make profits. But this is often made illegal as "profiteering", and as a result no one stock up food, and more people die when the famine comes.
- rightbyte 7y ago
  Are you including "daytrading"/algorithmical short term trading when you mean trading creates value?
  - BurningFrog 7y ago
    I do. Though admittedly it's harder to see it there :) If I ran a stock exchange, I'd look into changing the trading system so trades just happened on even seconds or something, so all this deadweight spending of billions on nanosecond trading advantages could end.
yyyk 7y ago
But sometimes imports and exports do have 'winners' and 'losers'. For example, there are well documented cases of 'China shock'[0]. Even if you might posit an ecomony-level gain, distributional effects means many may lose. By itself, saying 'not zero-sum' is not an answer for those policy issues but a slogan. [0] http://chinashock.info/ http://chinashock.info/

BurningFrog 7y ago

All trade is a victim of this. In reality, trade always creates value, and you can argue that all wealth in the world is created from trade, most of it interpersonal. But people still feel instinctually that each transaction has a winner and a loser.

luckylion 7y ago
That'll likely depend on the definitions of trade and winning/losing. If you're starving and I'm the only one around and I sell you a loaf of bread for a million dollars, did we both win? Sure, you'll live another week, but I sold you a bread that you'd usually pay a few bucks for and got a million in return. If I'm paying the mafia for protection, do we both win? Sure, my restaurant doesn't burn down, but if the mafia didn't exist, it wouldn't burn down either. What about forced trades without perceived value, like a mandatory membership in organizations whose services you don't care for? What do you gain, besides not being thrown into jail?
- BurningFrog 7y ago
  It certainly does depend on the definitions. The unstated assumption is voluntary trades in a system of private property rights. Under those conditions, neither side will agree to the trade unless they benefit from it, so value is created for both sides. So the mafia protection fee is a robbery, not a trade. The mandatory membership probably too. The bread loaf is a trade, and both people undeniably profit. Emotionally, it feels "exploitative", but if you think about it, things are less clear. In reality, people stock up food to be prepared to sell it during famines in order to make profits. But this is often made illegal as "profiteering", and as a result no one stock up food, and more people die when the famine comes.
rightbyte 7y ago
Are you including "daytrading"/algorithmical short term trading when you mean trading creates value?
- BurningFrog 7y ago
  I do. Though admittedly it's harder to see it there :) If I ran a stock exchange, I'd look into changing the trading system so trades just happened on even seconds or something, so all this deadweight spending of billions on nanosecond trading advantages could end.

yyyk 7y ago

But sometimes imports and exports do have 'winners' and 'losers'. For example, there are well documented cases of 'China shock'[0]. Even if you might posit an ecomony-level gain, distributional effects means many may lose. By itself, saying 'not zero-sum' is not an answer for those policy issues but a slogan. [0] http://chinashock.info/ http://chinashock.info/